Opening remarks by the Honourable Chrystia Freeland, Minister of Foreign Affairs, for an appearance before the Standing Committee on International Trade

Check against delivery. This speech has been translated in accordance with the Government of Canada’s official languages policy and edited for posting and distribution in accordance with its communications policy.

June 19, 2018, Ottawa

Thank you, Mr. Chair. I’d like to begin by acknowledging that we are gathered on the traditional territory of the Algonquin.

I’m here today to speak about the Canada-U.S. trade relationship and I would like to take this opportunity to thank Canadians and leaders from across the country for our unified, Team Canada approach. I am very humbled and appreciative of this collective effort, and I would specifically like to recognize Canada’s premiers, labour leaders, business leaders and the NAFTA Council for their tremendous efforts to date. Also, to MPs from all parties, mayors, civil society and so many Canadians: thank you.

The Canada-U.S. economic relationship is an important relationship, and one of the things that has been so valuable to Canada is the fact that Canada is playing as a totally united team. That is absolutely essential. That is a powerful message for all Canadians and it’s a powerful message for Americans.

Thank you, Mr. Chair and fellow colleagues, for providing me with this opportunity to address the committee today. I will do my best to share the government’s point of view on the tariffs imposed by the United States on Canadian steel and aluminum and, more generally, on the status of NAFTA negotiations.

Let me begin with the tariffs.

Mr. Chair, Canada is the United States’ closest friend, ally and neighbour. We share the longest non-militarized border in the world. Our soldiers fought and died side by side in the First World War and Second World War, and in Korea, Afghanistan and Iraq. As I have now repeatedly stated, the idea that we can pose a threat to U.S. national security—which is the pretext under which our neighbours imposed these tariffs on Canadian steel and aluminum exports—is not only absurd, it’s insulting.

These Section 232 tariffs, Mr. Chair, are illegal under WTO and NAFTA rules. In fact, we have initiated a case at the WTO and have raised a case under Chapter 20 of NAFTA. As supporters of the rules-based international order, including in trade, it was very important for us to take this legal action.

Canada has no choice but to retaliate—with a measured, perfectly reciprocal, dollar-for-dollar response—and we will continue to do so. On May 31, the Prime Minister and I announced that Canada intends to impose tariffs on imports of steel, aluminum and other products from the United States—representing the total value of 2017 Canadian exports affected by the U.S. measures.

That total value is $16.6 billion, Mr. Chair—Canada’s strongest trade action since the Second World War.

Since we made that announcement, we have published two lists of goods: one list that will be subject to a 25% tariff; a second list that will be subject to a 10% tariff. These countermeasures will only apply to goods originating from the United States. They will take effect on July 1, 2018, and will remain in place until the United States eliminates its formal trade-restrictive measures against Canada. Consultations on these lists concluded on June 15.

Of particular note, Mr. Chair, in an effort to avoid any costs being passed on to Canadian families and consumers, we have purposely ensured that the products listed can be easily sourced from Canadian companies or non-U.S. trade partners.

I would like to take this occasion to thank Canadians for their input; please continue to be in touch with the Department of Finance.

As we take these steps, we act in close collaboration with our like-minded partners in the European Union and Mexico. They, too, are allies of the United States.

Mr. Chair, no one will benefit from this beggar-thy-neighbor approach. The price will be paid, in part, by American consumers and by American businesses. Canada is going to stand up in defence of the international rules-based order.

We will not escalate—and we will not back down.

Judging by the feedback I have received in the past few weeks, countless Canadians of all political stripes agree. Many have come out in support of our decision to defend Canadian workers and consumers. I would like to thank all members of the House of Commons, particularly Tracey Ramsey, for the unanimous consent motion that we passed. It is a testament to Canadian unity on this issue. I would also like to thank our provincial and territorial leaders, including Premier-designate Doug Ford, Premier Scott Moe, Premier John Horgan, as well as the Canadian Labour Congress and so many others, for their support.

One thing that I do want to point out, Mr. Chair, is that this unjustified trade action by the United States has no bearing on the ongoing negotiations between Canada, the United States and Mexico to modernize the North American Free Trade Agreement.

As far as Canada is concerned, these are entirely separate issues. That is also the case under U.S. law, strictly, given the fact that Section 232 is a national security provision.

We know that NAFTA is very much to the advantage of all three of our countries. When it comes to trade between Canada and the United States, our relationship is balanced and mutually beneficial. In fact, in goods and services overall, the United States has a slight trade surplus with Canada.

The United States also has a surplus in trade in manufactured goods, in trade in agricultural goods and in trade in steel.

And, as I know all of us are well aware, Canada is the largest market for the United States: larger than China, Japan and the United Kingdom combined.

A modernized, win-win-win deal that benefits all three NAFTA partners is possible, Mr. Chair, and we are working hard and patiently to achieve this outcome.

I made this point on Thursday when I met with U.S. Trade Representative Robert Lighthizer in Washington, D.C., and again in a conversation with him on Monday. I also had a constructive conversation with Secretary of State Mike Pompeo on Saturday, when we discussed NAFTA. I remain convinced that there is goodwill and a desire to move forward.

We feel, all three countries, that we can continue working now and that we will be working hard over the summer.

Thank you very much. I am happy now to take your questions.